Safeguarding your investment through insurance

3 mins reading

As a residential rental provider, mitigating risks through insurance is paramount with landlord insurance essential for protection against unforeseen events. According to EBM RentCover, understanding the difference between landlord insurance and home and contents insurance is crucial. While home and contents insurance typically cover events like fire and storm, they often do not cover loss of rent or tenant damage. Therefore, it’s important landlords have a specialised insurance policy for extra protection.

“Landlord insurance often offers cover for four main areas: tenant damage and loss of rent, contents insurance, building cover and legal liability,” EBM RentCover states. “Even the best property manager cannot control or predict a tenant’s relationship breakdown or job loss, or an attack by mother nature, which is why it is important to invest in extra protection.”

Key considerations for rental provider insurance include:
  • Comprehensive coverage: Landlord insurance extends beyond property damage, covering contents in events like fire, flood or storm.
  • Tailored policies: Properties with high rental values may require bespoke insurance policies, as standard landlord insurance may not fully cover rentals exceeding $1500 per week or periodic agreements.

  • Policy alignment: Reviewing potential gaps in coverage is crucial, especially if different providers handle landlord and building insurance. Ensuring alignment prevents gaps in claims during incidents requiring multiple types of coverage.

  • Understanding exclusions: Some insurance policies may exclude coverage for cleaning or rubbish removal. Property managers should be aware of these exclusions when making claims on your behalf, as the bond may need to be used in certain circumstance.

  • Strata complexes: Insuring investment properties within strata complexes, such as flats, units, or townhouses, can be more complex than detached houses. The building structures are owned collectively and managed through the body corporate, which is responsible for taking out strata insurance, including coverage for common areas such as common hallways, gardens and driveways. However, the body corporate does not cover unit contents, non-fixed appliances, furniture, electronics, loss of rent, or legal liability.

Even with the best intentions, unforeseeable events can lead to rent arrears and tenancy defaults. Insurance provides coverage during rental gaps and assists with clean-up costs, offering peace of mind and financial security for rental providers.

In compiling this article, Kay & Burton relied upon information supplied by several external sources. This article has been provided for general information only regarding and has not been tailored to your personal circumstance. Although high standards have been used in the preparation of the information, analysis, views, and projections presented in this article, Kay & Burton does not owe a duty of care to any person in respect of the contents and does not accept any responsibility or liability whatsoever for any loss or damage resulting from any use of, reliance on or reference to the contents of this article.